State grants to spur housing redevelopment

LANSING - The Michigan State Housing Development Authority (MSHDA) is beginning the first round of Neighborhood Stabilization Program grants worth more than $7.5 million to 15 cities.

The grants comes from the sale of bonds and money from private investors, said Mary Lou Keenon, communications director for MSHDA.

Among the 15 cities are Benton Harbor, Kalamazoo, Muskegon, Muskegon Heights, Roseville, Royal Oak, St. Clair Shores and Wyoming.

According to MSHDA, Muskegon's plans for its grant money - $570,460 - is to purchase five "functionally obsolete homes" and demolish them along with two foreclosed homes that will be resold to owners who will live on the property.

The buyers of the two homes will receive eight hours of housing counseling and up to $30,000 for a down payment, closing costs and principal reduction, said MSHDA.

Wilmern Griffin, the director of the Muskegon Department of Community and Neighborhood Services, said its plans aren't final and the city is working out the details with MSHDA. He said the details could be finalized by the middle of May.

David Thomas, neighborhood development supervisor for the Kalamazoo Community Planning and Development Deparment, said the city's original proposition called for $1.7 million but only $765,000 was approved.

Kalamazoo's grant money will assist six homebuyers in acquiring and rehabilitating foreclosed homes while demolishing 40 properties that are not salvageable so the land can be used for future development, Thomas said.

Two more cities including Farmington Hills may be added, said Keenon.

The initial funding will support the redevelopment of 116 residential units and the demolition of 276 deteriorated units throughout the state.

Over the next nine months, the cities will receive a combined $22 million.

MSHDA Executive Director Keith Molin said the money came at a critical time.

"Not only are foreclosures bringing down property values and creating blight, but many of these homes have been abandoned and are actually posing a serious threat to the surrounding neighborhoods," Molin said.